18 Resources to Help Grow Your SaaS Startup

SaaS resources

This article is part of our SaaS Business Startup Guide—a list of articles to help you plan, start, and grow your SaaS business!

You probably already know that there are plenty of resources out there to help you grow and scale your SaaS startup. But, there are so many available that it can actually be overwhelming.

To cut through the clutter, I turned to Noah Parsons, a SaaS-industry veteran and our COO here at Palo Alto Software (makers of Bplans).

Here’s our list of top resources to help you learn, stay informed, and grow your SaaS business successfully.

Download your free subscription sales forecast template today!

Podcasts

The SaaS Podcast

Want to get expert advice from top SaaS founders? You’re in luck with over 200 interviews recorded on The SaaS Podcast. Host Omer Khan conducts in-depth interviews with industry leaders that’ll help you scale your SaaS business.

Ready to get inspired? Start by listening to this episode to learn how Christian Owens, founder of Paddle, went from failure to $10 million ARR.

Startups for the Rest of Us

Co-hosts Mike Taber and Rob Walling have over 20 years’ of combined startup experience. Their podcast covers current projects they’re working on, expert advice, and the stories of other successful startups.

Not sure where to get started with more than 400 recorded episodes? You can’t go wrong by starting with their greatest hits list.

Andreessen Horowitz’s “You Bet Your SaaS!” 

Andreessen Horowitz, of a16z.com, hosts this podcast that touches on the industry at large and the voices that add to it. Keep up with trends and the future of SaaS by tuning in to the latest episodes.

Check out the list of all episodes to get into this podcast.

Ramp Podcast from InsightSquared

If you want a podcast focused on analytics, look no further than the Ramp podcast. Featuring interviews with industry experts, Ramp offers a deep-dive into the data end of running a SaaS business.

Learn how to ramp up your SaaS startup with the podcast episodes in their archive.

How I Built This 

While not strictly focused on software, NPR’s “How I Built This” podcast with Guy Raz is worth a listen. With a storytelling approach, Raz shares the stories of some of the biggest companies in the world. Often, learning from other industries helps to inspire growth in your own.

For a SaaS-specific episode of this podcast, don’t miss out on this one featuring Slack and Flickr with Stewart Butterfield.

Communities and networking

SaaStr

SaaStr is one of the largest communities in business software. Founded by Jason Lemkin, SaaStr initially started after Lemkin answered questions on Quora and ran a WordPress blog. The community grew over time and now includes online resources, meet-ups, and large scale events.

Discover what the SaaStr Academy has to offer in this community with everything you need to grow your business.

Growthhackers

If you’ve always wished there was a Reddit-style community for entrepreneurs in the SaaS space, you’ll love Growthhackers.

This free community allows you to post questions and interact with other experts looking to grow their businesses and teams. There are even expert AMAs (which stands for “ask me anything,” if you haven’t used Reddit before).

Dreamforce Conference

Want to attend one of the biggest SaaS conferences to connect in-person with forerunners of the industry? You’re bound to find the right people, content, and sessions at the annual Dreamforce conference, hosted by Salesforce.

Learn more about this event and the benefits of joining other attendees at this conference.

SaaS Invaders

Want to get involved with a kick “SaaS” community? SaaS Invaders created this digital space for people like you. Here you can browse through topics around all parts of running a SaaS business, sorted by latest posts or trending topics.

Get connected with other SaaS industry leaders with the latest posts.

Books and blogs

Lost & Founder: A Painfully Honest Field Guide to the Startup World

Rand Fishkin, the founder of Moz and Sparktoro, gives an inside look into startup life (spoiler: not all companies begin like Facebook). In Lost & Founder, you’ll get immersed by what it’s truly like in the startup world. Did you know it took fifteen years for Fishkin to build Moz?

It’s authentic, funny, and a great source of advice that’ll help you weather any SaaS startup storms.

A16z.com

Entrepreneurs Marc Andreessen and Ben Horowitz have put together some invaluable resources for those in the SaaS community. This site features their podcast episodes and articles on everything from financing your startup to company culture.

Be sure to check out their tech topics page, for more big-picture articles on the industry itself.

Price Intelligently

One of the most important things for a SaaS company is choosing the right pricing strategy. Price Intelligently focuses specifically on pricing strategies within the SaaS sector, both with the service they offer and on their blog. 

Take a look at their articles on pricing strategy to learn more about getting the most value out of your service.

ChartMogul’s Blog

From best practices to resources, the blog run by ChartMogul’s team covers it all for SaaS businesses. With customers like Notion and Typeform, ChartMogul provides a subscription growth tool and expert advice for industry leaders.

Start with the industry section to get a pulse on what’s happening now within the space.

Sixteen Ventures

If you’re looking for a blog with a focus on acquiring and retaining customers, get familiar with Sixteen Ventures. This blog run by Lincoln Murphy focuses on the customer lifecycle and how to best optimize customer acquisition and retention.

Check out the 20 most popular articles to get started.

Tomasz Tunguz

Venture capitalist Tomasz Tunguz blog focuses on the startup experience, including discussion of areas like culture, pricing, funding, and content marketing.

To start, check out his SaaS-specific posts—it’s an extensive list, and you’re sure to learn a lot.

SaaStock Learning Hub

SaaStock could be considered a one-stop shop for SaaS-related content. The media hub, created by entrepreneur Alex Theuma, began as a place to share information, learn, and network within the industry.

Learn more about how to get involved with the SaaS Revolutionary community to get started.

A Smart Bear Blog

Bringing humor to the industry is Jason Cohen’s A Smart Bear blog, which focuses on marketing and other startup “geekery.” With plenty of SaaS-industry experience (including selling his company for millions), this blog is an informative, fun resource.

Start with our favorite post by Cohen about what it means to have two big things in life but not three.

InsightSquared’s Top SaaS Sales Blogs

Cheating? Maybe—I’ve included a resource list within a resource list. However, this list by InsightSquared contains much more than just a couple of blogs. On this list, you’ll find notable entrepreneurs and venture capitalists in the field, useful apps, and a whole lot more. 

And of course, we have to mention the Bplans guide to starting a SaaS business. There, you’ll find information on writing a Lean Business Plan, a SaaS sales forecast template you can download for free, and more. 

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Briana Morgaine

Briana is the content marketing specialist for Bplans. She enjoys discussing marketing, social media, and the pros and cons of the Oxford comma. Bri is a resident of Portland, Oregon, and can be found working remotely from a variety of local coffee shops. She can also be found, infrequently, on Twitter.



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A Complete Guide to Forecasting Sales in a SaaS Business

SaaS forecasting

This article is part of our SaaS Business Startup Guide—a curated list of articles to help you plan, start, and grow your SaaS business!

We’re living in a subscription world. More and more, everything that we do and use is no longer being sold to us directly. Instead, we’re now paying monthly for all kinds of things.

While a lot of press has been given to the software as a service boom (SaaS), subscriptions are everywhere now. Some subscription business models, like gym memberships and magazines, have been around for a long time, while other subscription businesses are brand new and innovative.

These days, we pay small monthly fees to access almost everything in our world. From music services, such as Spotify and Pandora, to movie streaming sites like Netflix, to snacks and meal delivery like NatureBox and HelloFresh, it seems there’s a subscription service for anything and everything.

My local heating repair company is even getting in on the booming demand for subscription services and has launched a $10/month subscription service that includes basic system tune-ups, maintenance, and discounts on larger maintenance services.

Free saas sales forecast template

Subscription services are popular because it often costs less, in the short run, to start using a service. For the price of buying one album on iTunes, I can get access to the entire world of music on Spotify for one month. For the price of buying a new DVD, I can get access to the deep catalog of content available on Netflix. For a fraction of the cost of buying a treadmill, I can use an entire gym.

It’s no wonder that customers are flocking to subscription services to replace things that they once bought and owned outright. And, it’s no wonder that businesses are trying to come up with new and innovative subscription business models that they can offer to their customers.

If your business is building a subscription service, creating a reliable sales forecast is a critical step to understanding how your business will grow and what the key drivers of revenue growth will be.

Up next, I will walk you through the critical components of a subscription forecast, and show you exactly how to build your own. Our product, LivePlan, builds subscription forecasts automatically, so if you’re already a LivePlan user you’re in luck and can skip this article. But, if you’re using a spreadsheet and want to build your forecast yourself, you’ll want to follow along closely.

A few definitions you’ll need to know to build your subscription forecast

When you’re building a subscription sales forecast, there are a few terms that you need to understand that you won’t find in your traditional sales forecast.

Subscription period

We’ll start simply with the subscription period, which is essentially the length of time that a customer commits to subscribing to your service. Many services operate on a monthly subscription period, meaning that customers are paying a monthly fee to access the service and can cancel at any timethink Netflix or your gym membership.

Some services have annual subscription periods. In this case, customers are paying to get access to the service for a year, and can then renew at the end of the year. Magazines and enterprise software offerings often have annual subscription periods. In this article, I’ll be focusing on forecasting sales for a monthly subscription service. I’ll dig into annual subscriptions and other subscription lengths in a future post.

New subscribers, cancellations, and churn

New subscribers is also a fairly basic concept. This is simply the number of new customers that you sign up for your service in a given month.

Cancellations are exactly what it sounds likethese are the customers that choose to cancel your service each month.

Finally churn, which is the ultimate number that any company with a subscription business model must pay very close attention to. Churn is the percentage of customers that cancel and leave your service during the month. Low churn equals happy customers, while high churn means that users are canceling quickly and not subscribing to your service for a very long time.

You calculate churn by taking the number of customers who cancel during a month and divide by the number of customers you had at the beginning of the month:

Churn = Cancellations During a Month ÷ Customers at Start of Month

But, there is a wrinkle to the concept of churn because it’s really just like a leaky bucket. Think of churn as a hole in the bottom of the bucket. As long as the hole (churn) is small, you can keep the bucket full simply by adding more water (new subscribers) than is draining out.

The definitions above are all you need to know to be able to forecast your customer growth. The next few things we’ll talk about relate to the revenue that you will make from these customers.

How to calculate revenue from subscription services

Average revenue per user/customer (ARPU)

To start calculating how much money you will make, you need to estimate the average revenue per user/customer (ARPU). This is how much you plan to charge a customer each month. If you are building a forecast that has different price tiers, you may want to create a different forecast for each price tier. We’ll talk more about this a bit later.

Customer lifetime value (LTV)

Using your churn percentage, you can easily calculate your customer lifetime value (LTV). This is a prediction of how much money you expect to make from your customers over their projected lifetime with you. LTV is calculated by dividing average revenue per user by churn:

LTV = ARPU ÷ Churn %

This calculation will tell you how much your average customer is worth to you. For example, if your service costs $19/month and your churn is 5 percent, then your average customer will spend $380 on your service.

You can also calculate the expected customer lifetime—how long the average customer will be a subscriber—by dividing LTV by ARPU:

Customer lifetime = LTV ÷ ARPU

Customer lifetime can also be calculated by simply dividing 1 by your churn rate:

Customer lifetime = 1 ÷ Churn

Using the same example from above, the average customer lifetime would be 20 months (380 ÷ 19 = 20) or (1 ÷ .05 = 20).

Monthly recurring revenue (MRR)

Finally, we’ll want to know how much money you forecast to make each month, otherwise known as monthly recurring revenue (MRR). To calculate MRR, you just multiply your ARPU by the number of customers you have at the beginning of a given month plus the number of new customers you acquire:

MRR = ARPU x (starting subscribers + new subscribers)

Now it’s time to build a forecast

Now that we have the basic terminology for subscription forecasting down, it’s time to look at building an actual forecast.

As I mentioned, we’re going to focus in this article on building a simple forecast for a monthly subscription business, but many of the concepts discussed here can be used to build out a subscription forecast for different subscription periods.

Here’s what your spreadsheet will look like:

Screen Shot 2014-06-16 at 4.29.20 PM

Again, this is a fairly simple model that assumes that your service doesn’t have any one-time setup fees and that your business operates a simple monthly subscription service where customers pre-pay for a month of service. The model can get more complex if users can upgrade their services over time or if you have one-time setup fees or different contract lengths.

In our sample model, you can adjust the average revenue per user (ARPU) each month if you expect that, on average, some customers might upgrade to higher-priced services that you offer.

Starting subscribers is the number of customers that you have at the beginning of a month. In this forecast, we are starting with zero subscribers in our first month as a new business. In future months, we calculate starting subscribers by looking at how many customers we had at the beginning of the previous month and then add in new subscribers and subtract customers that decided to cancel.

In this sample model, we assume that customers pre-pay for a month of service ahead of time, so we calculate churn rate based on the number of customers that we start each month with rather than the number of customers that we end the month with.

From there, we calculate churn, the projected lifetime of an average customer in months and in dollars and finally calculate the total monthly recurring revenue that you should expect to collect in a given month.

You can download this sample subscription sales forecast here and we will tackle more complex forecasting in a future post. You can also read more about how we built our initial sales forecast for Outpost, our newest SaaS tool in this article.

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SaaS 101: Starting a Software as a Service Business

starting a SaaS business software as a service business

This article is part of our SaaS Business Startup Guide—expert resources to help you plan, start, and grow your SaaS business!

If you’re interested in starting a software as a service (SaaS) business, you’ll want to start with the basics. Here’s a quick overview of the details, benefits, and risks.

SaaS defined

SaaS (software as a service) means that users access software through their internet browser or a web-based app. The software maker hosts their product on their own servers, which is why SaaS products are sometimes referred to as a “hosted solution” or “web-based solution.”

It’s also common to hear SaaS products talked about as “cloud-based” solutions. In contrast, a desktop-based model is where an individual or company would install software on their computers and run it on their own servers.

Pricing models and customer acquisition

SaaS products often use a subscription-based pricing model. So instead of paying once for a lifetime of use, your customer pays on an ongoing basis—usually monthly or annually. You can think of it as a software license.

It’s a popular model because of the increased potential lifetime value of each customer. Instead of a flat lifetime value—like $120 for the single sale opportunity you have with each customer or user, you might charge $10 a month per user for as long as your customer uses your service. The longer they stick around, the higher their lifetime value.

When you build out your SaaS company’s business plan, spend some time modeling different subscription-based sales forecast scenarios so you can see how reducing churn (the number of canceled subscribers) and other variables can affect your path to profitability.

Download your free subscription sales forecast template today!

Growing SaaS companies are always testing their pricing models. There are a lot of different ways to get customers in the door to kick the tires, from offering free trials, to freemium services with upgrade options. Check out the Bplans guide to SaaS pricing models for more on how to get started.

Security and reliability

One of the objections you’ll probably hear from some prospective customers is that they’re worried about data security with SaaS products, and with apps in general. This is especially true if you’re presenting a cloud-based solution for something that used to only be available as a desktop version.

The concern is that “the cloud” has security vulnerabilities. But in actuality, legacy systems are actually more vulnerable than cloud-based apps. That said, take the responsibility of protecting your customers’ data very seriously.

What if you’re a non-technical founder?

If you have an idea for a software as a service business, but you don’t have the technical expertise to build your app yourself, it’s still possible to run a successful business. In his book “Lost and Founder,” Rand Fishkin talks about his journey as a non-technical CEO of Moz, a service company he founded and transformed into a SaaS company.

He emphasizes how important it was for him to learn (and keep learning) enough about the technical aspects of his business so that he was able to make good hires and understand technical roadblocks when they surfaced. And it’s not completely impossible to learn to code yourself—but it does take time.

Be mindful of your intellectual property—the code—whether you bring on an employee or outsource the technical work. A good contract can go a long way.

Starting with an MVP

There’s a great article in Geekwire on a Seattle founder of an app that helps parents find childcare. One of the best things about it is that it gives a clear example of what an MVP (minimum viable product) might look like for an app. In this case, it was just an Airtable spreadsheet that the founder posted online for free, where it got a lot of traffic in just a few days.

The point is that if you have an idea for a SaaS business, don’t invest all of your time and resources into creating the very best, most perfect version of your app before you start testing it. You want to use a lighter version so you can validate that the solution you’re offering is something people will pay for. You’ll waste a lot of time and energy if you skip validating your idea before you build the full-scale version.

Reid Hoffman famously said, “If you’re not embarrassed by the first version of your product, you launched too late.” The point isn’t to put out a bad product—it’s to see how it does quickly, before you invest a ton into it.

Funding your SaaS startup

Building a successful SaaS business doesn’t happen overnight. More so than in other industries, it’s easy to get the impression that SaaS companies grow very quickly—they just blow up over the course of a year. In reality, Spotify is more than 10 years old. Netflix is over 20 years old. It takes time to scale and grow a business. Keep that in mind when you’re looking for funding.

If you just have a business idea, but you haven’t tested it yet with an MVP or convinced anyone to pay for it, it’s going to be tough to make the case to angel investors or venture capitalists. They’re looking for traction in the marketplace, and that means you’re going to have to demonstrate that you can sell your product.

One of the other things you’ll hear is that some companies that take on investment run huge deficits for years on end—think Uber’s billions of dollars in losses. It’s true that lots of software companies that take on investment aren’t profitable for a long time. But investors are in it to win in the long term. You’re going to need realistic financials in your business plan, and a strategy to eventually be acquired.

But also keep in mind that depending on your end goals, it’s possible to run a profitable, healthy business for a long time without ever seeking outside investment. It all depends on your goals. Tim Berry talks about it in this articlenot all good businesses are good investments. (Full disclosure, Tim founded Palo Alto Software and Bplans; Palo Alto Software makes a SaaS business planning tool called LivePlan, and a shared inbox tool for teams.)

In the meantime, you might be able to fund your business idea with your day job or your savings. Maybe you have personal collateral that you can use to get a loan or line of credit, or maybe crowdfunding is an option.

Just start

One of the best things you can do in the early stages of your SaaS business is to map out a quick business plan. We call this approach a Lean Plan. You can do it quickly, and just by doing the process you’ll have thought through a lot of the most important parts of your business. Also, check out our SaaS and subscription business startup guide for more expert how-tos. 

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Brian MackleyBrian Mackley
Brian Mackley

Brian L. Mackley is a cofounder of the Technology Advocacy Group. His background as a record setting sales professional in the SaaS environment, and as a professional sales trainer enable him to share the inside knowledge with his clients. He has trained thousands of technology sales professionals over the past decade and now shares his secrets with organizations to help level the playing field when buying technology. As an expert in SaaS and negotiation techniques, he teaches executives how to adopt technology without getting taken advantage of by clever commissioned sales reps or purposely confusing contracts. He has developed the sales methods and training for some of the largest technology companies in the U.S.

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